Monday, December 10, 2012

Should loser pay civil costs if Court to blame? Yes, says the New Zealand Supreme Court

Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109 raises an interesting legal point - why should a losing civil party have to pay costs for an error of the Court (as opposed to the party opposite)? The Supreme Court had little difficulty dismissing this argument and holding that the "loser pays" rule applies regardless of whether the Court is at fault:

[13] If Mr Long's surmise was the Court of Appeal's reasoning, then the Court erred. In virtually every case where an appeal succeeds, the appellate court has formed the view that the Judge below went wrong in some way or other. For the purposes of costs in the appellate court, it does not matter why the Judge went wrong. The losing party on the appeal almost always has to pay costs to the winning party – and in that sense "pays for" the error (as found) of the judge below. That is the consequence of a respondent fighting to maintain its win and supporting the findings of the judge below. If the respondent accepts the judge below was wrong, then it should settle with the appellant or not seek to defend the appeal. In those circumstances, it would avoid liability for costs. Shoye did not adopt that stance in the Court of Appeal. We have seen its submissions. It sought to uphold what the Judge had found in its favour.